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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 2: So Tracy, since we've been doing the podcast for ten years,

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Speaker 2: you know, trying to talk to some of the big thinkers, right,

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Speaker 2: some of the people who have a little bit of

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Speaker 2: a perspective on how the world's changed. We say, how

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Speaker 2: the world's changed in ten years, but it's a little

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Speaker 2: bit arbitrary how the world's changed and what the next

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Speaker 2: ten years or fifty years are going to be.

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Speaker 3: Like big thinkers, thinking big thoughts.

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Speaker 2: Zooming out a little bit. And I think everyone sort

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Speaker 2: of is these days. I mean, it happens to be

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Speaker 2: that we're sort of celebrating our anniversary or birthday or

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Speaker 2: whatever it is. But I think it's just in the air,

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Speaker 2: you know, like everyone. I guess people are always trying

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Speaker 2: to think big. But there's something in the air right

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Speaker 2: now where everyone is trying to grapple with pretty evident

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Speaker 2: change that is afoot.

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Speaker 3: Well, here's the thing. The big story in markets is AI, sure, right,

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Speaker 3: and whether or not it's in a bubble, and AI

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Speaker 3: is a story that is not just about finance and markets.

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Speaker 3: Is a story that touches multiple things. So you have

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Speaker 3: it's a cultural, social, and political story. So you have

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Speaker 3: people talking literally about how AI is going to change

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Speaker 3: the world. It's going to change art, it's going to

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Speaker 3: change music, movies, people as well. Right, so some people

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Speaker 3: are going to lose their jobs, some people are going

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Speaker 3: to get rich. People talk about it in this existential way,

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Speaker 3: both for countries and companies. To your point, and if

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Speaker 3: you don't win in the AI race, then you are

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Speaker 3: literally dead right.

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Speaker 2: Part of the permanent underclass or whatever people say. And

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Speaker 2: then I think beyond AI, even if we didn't have

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Speaker 2: this boom that really started in late twenty twenty two,

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Speaker 2: even if that weren't going on, there'd be all these

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Speaker 2: other big questions related to technological competition, because we already

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Speaker 2: talked about that particularly.

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Speaker 4: Yeah we were Shauna.

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Speaker 2: There would be all the concerns about the size of

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Speaker 2: the debt. There'd be all the concerns about demographics and

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Speaker 2: so forth, and the perhaps strain that changes in demographics

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Speaker 2: are going to put on the existing labor force. So yes,

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Speaker 2: you have all of these things going on, big picture

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Speaker 2: questions then layer into the AI question. And I just

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Speaker 2: feel like people right now is we all feel it.

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Speaker 2: We're consumed by these like sort of forward uncertainty questions

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Speaker 2: about the integrity of elections and democracy and all of

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Speaker 2: these things. Is sort of we're at this clearing of

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Speaker 2: the woods where we don't know which.

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Speaker 5: Direction we're going to go.

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Speaker 3: You know who's very good at synthesizing major forces going

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Speaker 3: on in the world.

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Speaker 2: Well, we do, indeed have the perfect guest, someone who

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Speaker 2: many people turn to and who obviously is an incredible

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Speaker 2: track record of talking about things both in the big

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Speaker 2: picture and shorter cycles. We are going to be speaking

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Speaker 2: with Ray Dalio, the founder of Bridgewater. He ran it

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Speaker 2: for fifty years. That's kind of unbelievable.

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Speaker 3: You know, we've seen many market cycles.

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Speaker 2: Proud of ten years of doing a podcast, fifty years

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Speaker 2: of running what became the world's biggest hedge fund is

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Speaker 2: an orders of magnitude more impressive accomplishment. So Ray, thrilled

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Speaker 2: that you're in here in studio with us, Thrilled that

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Speaker 2: you're taking the time to chat with us once again,

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Speaker 2: appreciate you coming back on odd lots.

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Speaker 5: Thank you, Yeah, congratulations on ten years ago starting this thing.

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Speaker 5: I think of how the world has changed in those

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Speaker 5: ten years. And you want to talk macro. Listen, I

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Speaker 5: think you're.

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Speaker 2: You've heard, you've heard a thing or two about it.

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Speaker 5: Yeah, I am Global mac grobal mac and AI is

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Speaker 5: just a part of that. It's a small thing in

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Speaker 5: relationship to the whole global Macro.

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Speaker 2: I know we'll get into all this thing, but again,

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Speaker 2: like it feels like something we're patting ourselves on the

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Speaker 2: back of ten years podcast, fifty years of running a

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Speaker 2: hedge fund. Like I say, it doesn't even seem real

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Speaker 2: that that could even be possible. I mean, I know

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Speaker 2: it sounds crazy, but yeah, what a joy.

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Speaker 5: Oh it's fantastic. Yeah, you know I do.

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Speaker 2: You have any tips on longevity because we're like, well,

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Speaker 2: we want to be doing this again in ten years

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Speaker 2: and maybe again.

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Speaker 3: No one's asking us about in forty years.

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Speaker 4: Yeahh So.

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Speaker 5: Meaningful work and meaningful relationships, in other words, do you

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Speaker 5: have is it your passion to make it as great

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Speaker 5: as it can be and a shared passion? And are

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Speaker 5: you doing it with people that you care about? And

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Speaker 5: you have meaningful relationships? And if you've got that, you

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Speaker 5: know you've got the energy to keep evolving and you

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Speaker 5: know that's what it's about. I think that's for me

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Speaker 5: what it's about.

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Speaker 3: How would you characterize this moment, not just in markets,

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Speaker 3: but in global macro as you point out, in terms

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Speaker 3: of your experience, your career, how does it stack up

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Speaker 3: to previous decades.

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Speaker 5: It's part of a long term evolution that I'd like

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Speaker 5: to take you through. I love a brief macro perspective

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Speaker 5: of that evolution, and I'd like to start, if I could,

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Speaker 5: with a little story of what change me. Okay, when

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Speaker 5: I was twelve, I caddied and I earned a little

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Speaker 5: bit of money, and I put my money in the

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Speaker 5: stock market because everybody was in the stock market at

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Speaker 5: the time, and the people I caddied for would tell

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Speaker 5: me about the stock market, and I bought a company.

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Speaker 5: It's the only company I ever heard of that was

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Speaker 5: selling for less than five dollars a share.

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Speaker 3: Did you just choose it randomly?

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Speaker 5: It was the only company that was less than five

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Speaker 5: dollars a share that I heard of, and I figured

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Speaker 5: if I could buy more share, so if it went up,

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Speaker 5: I'd make more money. That was my logic. Okay, you

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Speaker 5: know there.

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Speaker 4: Are many people today in the market anyway, keep going.

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Speaker 4: But the silliest lot. The number of people.

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Speaker 2: Out there who I believe like have come to think

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Speaker 2: similar logic, particularly in other areas like crypto.

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Speaker 5: Anyway, I didn't know anything about what I was doing

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Speaker 5: on It was obviously stupid. But what happened was it

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Speaker 5: was company that was about to go bro another company

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Speaker 5: acquired it, and when tripled in value, I thought I

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Speaker 5: was smart and it is an easy game, and I

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Speaker 5: got hooked on the game. Okay, fast forward. Graduated college

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Speaker 5: in nineteen seventy one, clerking on the floor of the

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Speaker 5: New York Stock Exchange before I went to graduate school.

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Speaker 5: In the summer August fifteenth, nineteen seventy one, President Nixon

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Speaker 5: gets on the television and says, you're not going to

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Speaker 5: get the gold. Gold was money then, and you had

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Speaker 5: paper money and it depreciated in value, so you're not

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Speaker 5: going to get the gold. And I walked on the

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Speaker 5: floor of the stock Exchange the next morning, and I thought,

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Speaker 5: this is a big crisis. Money as we know it is ending.

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Speaker 5: We're going to have a problem. And it went up

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Speaker 5: more than it had gone up in decades. And I

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Speaker 5: didn't that's because I didn't know what a devaluation was.

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Speaker 5: So I studied history, and I found the exact same

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Speaker 5: thing happened in March of nineteen thirty three with Roosevelt

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Speaker 5: getting on the radio and making the exact same move.

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Speaker 5: Because they didn't have enough real money back then it

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Speaker 5: was gold was real money. They didn't have it. And

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Speaker 5: that led me to realize for the first time that

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Speaker 5: I needed to understand things that happened before my lifetime,

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Speaker 5: not just my experiences. So I studied the thirties, and

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Speaker 5: because I studied the thirties, I was able to anticipate

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Speaker 5: the two thousand and eight financial crisis because it was

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Speaker 5: the thing that was playing over and over again. And

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Speaker 5: there are those things that are going on now. Okay,

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Speaker 5: we'll get into those. But it led me study history.

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Speaker 5: So about six or seven years ago, I studied last

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Speaker 5: five hundred years of history to think what causes the

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Speaker 5: rise and decline of reserve currencies in the empires? And

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Speaker 5: I said, the last five hundred years, and that brings

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Speaker 5: me to the five big forces. Okay, the five big

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Speaker 5: forces are and they each have a mechanic to them,

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Speaker 5: a dynamic. The first is how money, debt, markets, and

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Speaker 5: economics works. Okay, and we'll get into that the second.

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Speaker 5: By the way, there's a big cycle there is, and

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Speaker 5: we can call it a monetary order, and there's a

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Speaker 5: monetary order that always happens and breaks down, and it's

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Speaker 5: part of an arc that has to do with limitations

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Speaker 5: on debt and money. And we'll get into that.

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Speaker 3: Like a leverage cycle.

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Speaker 5: Right, how much debt can you take on? And what

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Speaker 5: is the value of money? Money's supposed to have a

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Speaker 5: storehold of wealth? Is debt a storehold of wealth? And

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Speaker 5: what is our money? That's a question that we have

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Speaker 5: to deal with today. Right, what is the money that

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Speaker 5: you can be an effective storehold of wealth? Okay? And

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Speaker 5: are we at the end of our debt cycle? Okay?

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Speaker 5: That's number one. Number two related to this money and

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Speaker 5: who has money and wealth differences and so on. A

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Speaker 5: part of the cycle is that capitalism creates great opportunities

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Speaker 5: for inventiveness, to be productive and so on, and it

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Speaker 5: raises living standards and it raises wealth, but it raises

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Speaker 5: wealth in an unequal way, and there are big wealth

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Speaker 5: differences that naturally come as a part of the cycle,

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Speaker 5: and those wealth and then values differences get to a

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Speaker 5: point where there are irreconcilable differences So throughout history there's

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Speaker 5: the left and there's the right. There's the rich and

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Speaker 5: there's the poor, and there are those who are liberals

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Speaker 5: and those who are conservatives, and throughout history they have

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Speaker 5: a conflict, particularly if you have an economic problem. So

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Speaker 5: that's the second force, right. The third force is the

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Speaker 5: changing world order, the international geopolitical order, and that has

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Speaker 5: a cycle to it too. You started last time, you

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Speaker 5: start in nineteen forty five, the end of the war.

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Speaker 5: The war determines who has power. The powerful determine what

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Speaker 5: the new world order is like. And then you have

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Speaker 5: the rising power challenging the existing power, and then you

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Speaker 5: change the dynamic of the world order. The world order

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Speaker 5: always changes. The monetary order changes, the domestic political order changes,

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Speaker 5: the world order changes, and there is that arc. Number

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Speaker 5: fourth force is acts of nature. Throughout history, drought, floods,

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Speaker 5: and pandemics have killed more people and toppled more orders

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Speaker 5: than the first three that I mentioned. And number five

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Speaker 5: throughout history is man's inventiveness, particularly of new technologies. Okay,

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Speaker 5: and here we are with AI, and all of those

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Speaker 5: are connected. There each relate. What happens with AI affects productivity,

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Speaker 5: effects who gets the money oh, what happens in geopolitical

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Speaker 5: You have to spend money to have a military and

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Speaker 5: the conflicts and then there are trade wars, and it

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Speaker 5: all transpires pretty much in the same way. Over those

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Speaker 5: five hundred years. You can see these cycles in that pattern.

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Speaker 2: It is pretty incredible listening to this and thinking, you

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Speaker 2: know what, it's not just our imagination. We are in

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Speaker 2: a time of extraordinary change. We had a global pandemic

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Speaker 2: that disrupted life for everyone on Earth in varying ways,

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Speaker 2: at least to some extent. We do have this unbelievable

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Speaker 2: technology that everyone is trying to wrap their heads around

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Speaker 2: with AI. We did have, even starting you know, arguably

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Speaker 2: ten years ago, the emergence of serious trade tensions with China.

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Speaker 2: We do see the emergence of their military clearly getting

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Speaker 2: much more strong. Like, you know, you see all these

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Speaker 2: things like, it's not we're I guess we're not hallucinating.

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Speaker 4: Some big stuff is going on these days.

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Speaker 5: Well, yes, And the thing that I would like to

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Speaker 5: focus on is the mechanics of how that happens, the

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Speaker 5: interdep relationships between where are we in the debt cycle,

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Speaker 5: where are we in wealth. We'll talk about these things.

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Speaker 5: I hope, what does that mean geopolitical and so on?

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Speaker 5: And if for me it's like watching the movie over

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Speaker 5: and over again. There is connections and there's a cyclicality

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Speaker 5: to this, a big cycle dynamic, so that we can

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Speaker 5: step back. I think there's too much intent. Everybody looks

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Speaker 5: at the news item of the day and they don't

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Speaker 5: step back and see the big arc and the cause

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Speaker 5: effect relationships. So that's why I'm hoping we can get

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Speaker 5: into that.

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Speaker 3: Okay, well, let me try to thread the needle between

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Speaker 3: the news item of the day and the big arc.

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Speaker 3: But when you look at something like AI, how does

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Speaker 3: that fit into your five forces framework? Draw the lines

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Speaker 3: for us as we well.

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Speaker 5: Next, I mean, first of all, it has tremendous effect

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Speaker 5: on the economics of it. Right, it looks to me

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Speaker 5: very very similar to all the times in history that

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Speaker 5: there was great inventions and great changes, such as the

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Speaker 5: twenties late twenties.

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Speaker 3: So a real productive show.

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Speaker 5: It's a change and maybe the greatest ever. But right

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Speaker 5: up there, but imagine, let me take you into the twenties.

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Speaker 3: Imagine we need to get like a time warp soundtrack

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Speaker 3: on it, back in time.

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Speaker 5: But first time electricity is going into houses and you

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Speaker 5: can have washing machines and refrigerators. First time we have

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Speaker 5: the car. Okay, first time that we have airplanes, First

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Speaker 5: time we have movies that you can go at ten,

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Speaker 5: First time you have radio. You used to have silence

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Speaker 5: in your house, and so on. The first invention of

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Speaker 5: television and so on. Can you imagine it would be

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Speaker 5: much more immediate and exciting. You see the revolutions in

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Speaker 5: those things. And so there's a mechanic to a mechanism

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Speaker 5: of which how does wealth get created? And what's the

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Speaker 5: difference of wealth, and how does a bu come and

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Speaker 5: how does a bubble go? In other words, to distinguish it.

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Speaker 5: And that's, by the way, many of those bubbles. So

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Speaker 5: I can go back in history and give you many examples,

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Speaker 5: but that would be a good example. So what makes

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Speaker 5: it go up? And what is the difference between wealth

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Speaker 5: and money? So you get into the mechanics. Wealth is

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Speaker 5: not money, okay. So and this becomes very relevant to

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Speaker 5: us now because what you do, what say, okay, but

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Speaker 5: let me give you an example. Yeah, okay, you come

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Speaker 5: up with a great idea, you want to create a unicorn.

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Speaker 5: You sell fifty million dollars of the sock and you

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Speaker 5: value it a billion dollars. Okay, now you're a billionaire,

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Speaker 5: and now that company is worth a billion dollars.

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Speaker 3: But what happens is it really worth a billion?

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Speaker 2: Child or teenagers at some point had this idea, Right,

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Speaker 2: I'm going to start a company and then Tracy, I'm

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Speaker 2: going to sell her a dollar's worth of share.

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Speaker 4: But it's just this friend and suddenly, oh, I'm.

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Speaker 5: A billionaires and wealth is being created.

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Speaker 2: Suddenly, Like I think everyone has this scheme at some

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Speaker 2: point in their life.

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Speaker 5: Okay, But the importance thing to realize is wealth is

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Speaker 5: different from money. Okay, wealth you can't you can't spend wealth.

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Speaker 5: You have to sell wealth in order to get money

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Speaker 5: to go buy things. Okay. And so how do the

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Speaker 5: bubbles happen? Okay, The bubbles happen in the way that

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Speaker 5: you create these needs for money, and then the wealth

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Speaker 5: rises and then there's a need to sell it. For example,

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Speaker 5: let's imagine that we put in wealth taxes. Okay, Okay,

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Speaker 5: what's going to happen? Those are going to need to

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Speaker 5: sell some of that stock to be able to get

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Speaker 5: up the cash to be able to pay taxes. Right,

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Speaker 5: whether for whatever reason, the need for cash happens, and

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Speaker 5: you want to make a conversion from wealth to money

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Speaker 5: to be able to come up with the money, and

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Speaker 5: all the bubbles it's worked this way. There's not enough cash,

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Speaker 5: and there's the desire for that cash, and then you

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Speaker 5: sell it and the dynamic begins to work in reverse.

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Speaker 5: So that's all I'm talking about is mechanics. So when

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Speaker 5: you ask me the question, and I look at today today,

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Speaker 5: it looks like another one of those Okay, who's got

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Speaker 5: the wealth? And then where is the vulnerability that can

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Speaker 5: Is this real wealth or is it accounting wealth? And

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Speaker 5: then and people make the mistake of thinking will it

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Speaker 5: produce an income over its time in order to justify

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Speaker 5: that valuation. That's not what make bubbles okay, because the

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Speaker 5: answer to that question did not change between nineteen twenty

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Speaker 5: eight and nineteen thirty one. It's not like they found

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Speaker 5: out the answer and then they say, Okay, that's okay.

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Speaker 5: It's this dynamic between wealth and money okay. So there's

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Speaker 5: a mechanics to the way this happens, right, And if

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Speaker 5: you understand those, and it goes back a long time.

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Speaker 5: If you go back to the Old Testament, the year

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Speaker 5: of you believe. Okay, how do you deal with debt

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Speaker 5: and you have to pay back the debt because debt

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Speaker 5: is a need for money. I have to pay deliver

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Speaker 5: money on my debt. So it's important to understand those mechanics.

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Speaker 2: One of the things that you hear a lot when

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Speaker 2: people characterize the economy today of twenty twenty five is

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Speaker 2: that a lot of it is writing on people's wealth.

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Speaker 2: People talk about, you know, the K shaped recovery. They

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Speaker 2: talk about how people in the higher income or wealth

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Speaker 2: quintiles are really driving consumption, et cetera. Then we look

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Speaker 2: at these large obligations that we have, whether national debt

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Speaker 2: or just the obligations to care for seniors, et cetera.

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Speaker 2: Is this sort of where it comes together that at

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Speaker 2: some point, maybe we don't call it a well text,

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Speaker 2: et cetera, but where the political entity feels compelled to

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Speaker 2: go after the quote wealth, the wealth that exists on paper.

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Speaker 5: Yes, and it's happened over and over and over again

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Speaker 5: for basically the same reasons. Okay, if you look at

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Speaker 5: the thirties for example, or it's the same you need

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Speaker 5: the money, Okay, so just watch what's happening right there's

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Speaker 5: a small group between one and ten percent of the

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Speaker 5: population that this is going unbelievably great for right, And

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Speaker 5: then there's the bottom sixty percent. The bottom sixty percent

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Speaker 5: are having problems being productive and being affected. Sixty percent

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Speaker 5: of Americans have the lowest sixth grade reading level. Okay,

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Speaker 5: the stock ownership of the top ten percent, they own

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Speaker 5: about ninety percent of the stocks. The bottom sixty percent

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Speaker 5: own about five percent of the stocks. So we're seeing

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Speaker 5: this wealth, and who are you going to get the

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Speaker 5: money from the way you used to get the money

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Speaker 5: was that you would borrow the money, would the debt

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Speaker 5: would continue to rise relative to d GDP or relative

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Speaker 5: to your incomes, and then you'd spend. Well, we're close

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Speaker 5: to not being able to have that happen for mechanical

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Speaker 5: reasons that are worth understanding. One man's that's or another

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Speaker 5: man's assets. And if you're holding a lot of bonds,

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Speaker 5: a lot of government bonds, that's a lot of debt.

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Speaker 5: Is that a good storehold of wealth? And then when

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Speaker 5: you have the political or geopolitical problems that are going on, conflicts,

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Speaker 5: then the foreign ownership owners of those who own about

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Speaker 5: a third of the bonds may not want to hold

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Speaker 5: those bonds because they think it may not be a

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Speaker 5: good store old of wealth, either because it's being depreciated

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Speaker 5: or because they may have sanctions. So if you go back,

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Speaker 5: like into the thirties before, there's always the economic war,

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Speaker 5: including the financial war, in which entities are cut off

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Speaker 5: sanction we call them now. Okay, So there is this

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Speaker 5: dynamic in which and it's not just an American dynamic,

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Speaker 5: it's a UK dynamic, it's a France dynamic, it's a

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Speaker 5: Chinese dynamic in which we're at a point where it's

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Speaker 5: not easy to keep doing it the way we were

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Speaker 5: doing it, by selling more and more of those bonds

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Speaker 5: in that way, and so then we'll look at it.

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Speaker 5: You can't raise, you can't borrow like you used to.

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Speaker 5: Number two. I went to Washington, speaking leaders on both sides.

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Speaker 5: I said, we got to get the budget down to

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Speaker 5: three percent of GDP, and you can do with that

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Speaker 5: if you take it for this, a little bit of

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Speaker 5: this and that, and you can do that. The answer

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Speaker 5: I get is, and it's the same in the UK,

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Speaker 5: it's the same in France, same role around the world.

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Speaker 5: You have to understand that I can't I have to

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Speaker 5: make one of two pledges or both. I will not

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Speaker 5: raise your taxes and I will not cut your benefits. Okay,

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Speaker 5: so now we talk ball.

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Speaker 3: It's not that much.

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Speaker 5: You can't borrow, you can't keep it up as it was.

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Speaker 5: You can't raise the taxes politics, okay, you can't cut

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Speaker 5: the spending. Okay. So there we are. It's different. The

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Speaker 5: world is very different from I was thinking about your

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Speaker 5: tenth year anniversary. Okay, twenty fifteen. Yeah, okay, so think

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Speaker 5: about how different the world is as a function of

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Speaker 5: these five forces. Right, that's what it looks like.

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Speaker 3: Right, absolutely, So can we talk about this in a

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Speaker 3: US context specifically since you brought up DC, but it

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Speaker 3: feels like US especially has changed in ten years, so

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Speaker 3: rising inequality, the deficit is higher than ever, and we

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Speaker 3: also have an administration which seems to be redefining America's

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Speaker 3: place in the world. How does that fit into again

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Speaker 3: your five forces framework? And I guess I should bring

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Speaker 3: up the debasement trade as well, because this was a

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Speaker 3: big theme earlier in the year, that the idea that

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Speaker 3: you know, people don't want to be in the dollar

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Speaker 3: because they don't know what's going to happen with the debt,

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Speaker 3: or because they're worried about sanctions and limits on currencies.

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Speaker 5: It's all the same, isn't it. And it's all interrelated, right,

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Speaker 5: I mean, okay, and it's all understandable, right, it's all.

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Speaker 5: You have a financial limitation, you have large wealth gaps,

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Speaker 5: You reach the point that you don't want to negotiate

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Speaker 5: your sick and tired. The electorate is sick and tired

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Speaker 5: of hearing these excuses. They want populism. So populism arises

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Speaker 5: from this, and populism of the left and populism of

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Speaker 5: the right. So they've greater polarity, and they say, I

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Speaker 5: don't want to compromise my things. I want it delivered.

404
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Speaker 5: So win for me, okay, win for me my values,

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Speaker 5: my way of operating. And therefore you have irreconcilable differences.

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Speaker 5: And so if you look at history, the people who

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Speaker 5: arise or of the same character, have you produce populists

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Speaker 5: because of that set of circumstances. While the world is changing. Okay,

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Speaker 5: so what is the place in the world we can't

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Speaker 5: sustain what we were doing before. Think of the relationship,

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Speaker 5: let's say between the United States and China by way

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Speaker 5: of example. Okay, the dynamic of Chinese will sell inexpensive

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Speaker 5: their goods cost effectively. Americans buy it, send them the money.

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Speaker 5: The Chinese take the money and they put it into bonds.

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Speaker 5: That dynamic can't exist anymore. First of all, they don't

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Speaker 5: trust each other. Everybody's worried, Okay. The United States will worry,

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Speaker 5: can I can't be dependent on imports from China? The

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Speaker 5: Chinese worry that I can't be dependent that you're going

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Speaker 5: to give me. I'm a creditor. Am I going to

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Speaker 5: get my money? If you study history, maybe because of conflict,

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Speaker 5: I can be a problem. You lose the middle class

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Speaker 5: because they are the manufacturers. You ship manufacturing to China,

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Speaker 5: and so you don't have the man and you say

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Speaker 5: we have to bring back manufacturing. We need self sufficiency. Okay,

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Speaker 5: So now self sufficiency means you cannot continue that dynamic anymore. Right,

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Speaker 5: And then what do you do when there's the challenge

427
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Speaker 5: the wars that are not the military wars, the trade war,

428
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Speaker 5: the technology war, the geopolitical influence war. It's not like

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Speaker 5: you can go to what was imagined in the world

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Speaker 5: post World War two period that the United States said

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Speaker 5: we're going to have a multilateral world order we're going

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Speaker 5: to have a United Nations and we're going to go vote,

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Speaker 5: and we're going to have a World Bank, and we're

434
00:24:39,760 --> 00:24:43,360
Speaker 5: going to have all these world organ a World Trade

435
00:24:43,480 --> 00:24:46,359
Speaker 5: Organization and so on. We're going to have those types

436
00:24:46,400 --> 00:24:50,040
Speaker 5: of things. Well, that's that's naive. We're past that. So

437
00:24:50,080 --> 00:24:54,200
Speaker 5: we switch from a multilateral world order to a unilateral

438
00:24:54,240 --> 00:24:58,560
Speaker 5: world order where power matters. Right, that's what's going on. Right.

439
00:25:00,000 --> 00:25:02,480
Speaker 3: So, Joe, I'm kind of laughing here because I'm thinking

440
00:25:02,480 --> 00:25:05,719
Speaker 3: back to both of us studied international relations right in college.

441
00:25:05,760 --> 00:25:10,160
Speaker 3: I'm thinking how much time I spent studying international institutions

442
00:25:10,720 --> 00:25:14,800
Speaker 3: like the World Trade Organization and then un Yeah, totally irrelevant.

443
00:25:14,800 --> 00:25:17,679
Speaker 2: Now, can I ask you a personal question? Not that personal,

444
00:25:17,920 --> 00:25:20,199
Speaker 2: but we had you on the podcast in March and

445
00:25:20,240 --> 00:25:23,160
Speaker 2: you were talking about the scale of the US debt

446
00:25:23,240 --> 00:25:25,159
Speaker 2: and so forth, and it was, you know, this was

447
00:25:25,200 --> 00:25:28,080
Speaker 2: on the eve of when the big tax cut negotiations

448
00:25:28,080 --> 00:25:30,200
Speaker 2: were happening. It was clear that the White House wanted

449
00:25:30,240 --> 00:25:32,200
Speaker 2: to push a tax cut, and as you mentioned, you

450
00:25:32,280 --> 00:25:35,760
Speaker 2: went to DC and you know, you were say, fine,

451
00:25:35,840 --> 00:25:38,520
Speaker 2: there are ways to get the budget deficit within three

452
00:25:38,520 --> 00:25:41,919
Speaker 2: percent of GDP. This is not an insurmountable task. But

453
00:25:42,600 --> 00:25:44,359
Speaker 2: you know, right now there does not seem to be

454
00:25:44,400 --> 00:25:48,880
Speaker 2: any meaningful change in the spending or deficit trajectory. Did

455
00:25:48,920 --> 00:25:52,639
Speaker 2: you find that personally demoralizing? You were concerned in March.

456
00:25:53,000 --> 00:25:56,480
Speaker 2: Now here we are talking on November fourteenth, you know,

457
00:25:56,560 --> 00:26:00,240
Speaker 2: the last eight months have your you got more concern earn?

458
00:26:00,760 --> 00:26:02,960
Speaker 2: Did that experience have any effect on you.

459
00:26:03,240 --> 00:26:05,600
Speaker 5: I've been in the markets for a very very long time.

460
00:26:06,000 --> 00:26:10,840
Speaker 5: I'm a hyper realist. I view everything as a learning experience,

461
00:26:11,440 --> 00:26:15,720
Speaker 5: and so when I don't get demoralized, I find it

462
00:26:15,840 --> 00:26:20,840
Speaker 5: interesting and informative. So I was disappointed. I mean, it

463
00:26:20,880 --> 00:26:24,080
Speaker 5: would have been better for everybody if we could work

464
00:26:24,119 --> 00:26:28,320
Speaker 5: together and we can also find even if we couldn't

465
00:26:28,359 --> 00:26:31,280
Speaker 5: agree on how to do it, just do it proportionately

466
00:26:31,320 --> 00:26:34,560
Speaker 5: across things to make those changes to try to bring

467
00:26:34,640 --> 00:26:37,959
Speaker 5: that in order. But it was a good reminder of

468
00:26:38,000 --> 00:26:41,600
Speaker 5: where we are in the political cycle to understand the

469
00:26:41,720 --> 00:26:44,239
Speaker 5: nature of that. And so that's what it is. You

470
00:26:44,320 --> 00:26:47,440
Speaker 5: can't be idealistic, Yeah, you have to be realistic.

471
00:26:47,680 --> 00:26:50,879
Speaker 2: I consider myself to be someone who every new experience

472
00:26:50,960 --> 00:26:53,840
Speaker 2: is a learning environment and that's why I love the

473
00:26:54,000 --> 00:26:56,320
Speaker 2: job that I have and everything is new and interesting.

474
00:26:56,560 --> 00:26:58,680
Speaker 4: But occasionally things that.

475
00:26:58,640 --> 00:27:00,600
Speaker 2: The news get to me a bit more than I

476
00:27:00,640 --> 00:27:01,160
Speaker 2: wish they would.

477
00:27:01,480 --> 00:27:03,800
Speaker 5: There's a there's a feeling in the stomachyah.

478
00:27:03,920 --> 00:27:06,680
Speaker 2: Yeah, and it's like this is not just an intellectual exercise.

479
00:27:06,720 --> 00:27:08,280
Speaker 2: This actually stakes.

480
00:27:07,840 --> 00:27:12,119
Speaker 5: For but for me. Listen, I've been doing markets fifty years.

481
00:27:12,240 --> 00:27:14,760
Speaker 5: Yeah okay, And a lot of motion can get in

482
00:27:15,160 --> 00:27:17,720
Speaker 5: to the to the way of how is it the meditation.

483
00:27:18,240 --> 00:27:20,960
Speaker 5: Meditation has a big effect. Oh yeh, yeah, you no, no,

484
00:27:21,040 --> 00:27:22,080
Speaker 5: you're touching on something, right.

485
00:27:22,240 --> 00:27:25,240
Speaker 2: Is this like a key element of separating the emotion

486
00:27:25,440 --> 00:27:26,200
Speaker 2: from the learning.

487
00:27:26,320 --> 00:27:30,120
Speaker 5: That's right. The ability this meditation, I would say, would

488
00:27:30,200 --> 00:27:33,520
Speaker 5: be maybe the single most important reason for whatever success

489
00:27:33,560 --> 00:27:37,680
Speaker 5: I've had. I mean meaning, it has given me an

490
00:27:37,840 --> 00:27:43,160
Speaker 5: equanimity to step back, to see the arc, to accept

491
00:27:43,240 --> 00:27:46,440
Speaker 5: there's a life cycle. Okay, I'm seventy six years old.

492
00:27:46,480 --> 00:27:49,360
Speaker 5: I know where it is. People. You know, there's all

493
00:27:49,400 --> 00:27:51,960
Speaker 5: sorts of things that we all go through and so on.

494
00:27:52,280 --> 00:27:57,080
Speaker 5: To the ability to step back align the subliminal, the

495
00:27:57,320 --> 00:28:01,240
Speaker 5: subconscious mind, which has an effect and the intellectual mind

496
00:28:01,440 --> 00:28:03,800
Speaker 5: to be able to do that while still feeling the

497
00:28:03,800 --> 00:28:07,600
Speaker 5: emotions but being able to look down on how does

498
00:28:07,680 --> 00:28:11,920
Speaker 5: reality work and almost even things we don't wish were true.

499
00:28:12,359 --> 00:28:16,159
Speaker 5: It's like the tooth Fairy or Santa Claus. Okay, we

500
00:28:16,240 --> 00:28:19,000
Speaker 5: wish that we exist, but we can accept the fact

501
00:28:19,080 --> 00:28:22,879
Speaker 5: that they don't exist. Don't have our preconception, and just

502
00:28:23,080 --> 00:28:26,960
Speaker 5: learn here's reality and how to deal with reality. Meditation

503
00:28:27,080 --> 00:28:29,320
Speaker 5: has helped me a lot to do that, But I

504
00:28:29,359 --> 00:28:30,760
Speaker 5: think that's the right approach.

505
00:28:31,880 --> 00:28:35,520
Speaker 3: Well, okay, so if you meditate and you recognize the

506
00:28:35,640 --> 00:28:39,560
Speaker 3: arc of history, what do you actually do with that information,

507
00:28:39,840 --> 00:28:43,400
Speaker 3: especially if you're trading or investing, Because I think part

508
00:28:43,440 --> 00:28:46,000
Speaker 3: of the problem when we have these conversations is we

509
00:28:46,080 --> 00:28:48,080
Speaker 3: talk about like, oh, the debt keeps going up, and

510
00:28:48,160 --> 00:28:52,000
Speaker 3: there's political polarization, and it just seems like there aren't

511
00:28:52,040 --> 00:28:54,960
Speaker 3: many solutions to those problems and there's not much we

512
00:28:55,040 --> 00:28:57,040
Speaker 3: can do with that recognition.

513
00:28:57,200 --> 00:29:01,040
Speaker 5: Well, I just disagree. I think that what I think

514
00:29:01,080 --> 00:29:06,400
Speaker 5: you'll ask yourself, how does it work mechanistically? What effect

515
00:29:06,640 --> 00:29:11,880
Speaker 5: can I have on how it's handled, How any difficult

516
00:29:11,960 --> 00:29:15,240
Speaker 5: situation is handled, like being in dead and having these

517
00:29:15,280 --> 00:29:17,800
Speaker 5: conflicts and so on, how do you handle it well

518
00:29:18,160 --> 00:29:21,320
Speaker 5: for the for the greater good and whatever? And then

519
00:29:22,280 --> 00:29:25,640
Speaker 5: or maybe you can't change the world. But you can

520
00:29:25,760 --> 00:29:28,520
Speaker 5: deal with it yourself and what do I do to

521
00:29:28,600 --> 00:29:31,920
Speaker 5: take care of myself, my family and so on? And

522
00:29:31,960 --> 00:29:35,800
Speaker 5: you can you can deal with that by first understanding

523
00:29:36,080 --> 00:29:39,760
Speaker 5: how does it work mechanistically. That's that's why I wrote

524
00:29:39,760 --> 00:29:42,800
Speaker 5: these books. The last book is How Countries Go Broke.

525
00:29:43,080 --> 00:29:45,920
Speaker 5: I'm not it's it's the mechanics of it. And so

526
00:29:46,000 --> 00:29:48,200
Speaker 5: you could see it as indicators and you can do

527
00:29:48,280 --> 00:29:51,320
Speaker 5: the calculation and you can line it up with what's happening,

528
00:29:51,600 --> 00:29:54,120
Speaker 5: and you know where you are. You know how you

529
00:29:54,160 --> 00:29:56,880
Speaker 5: can store your money, how do you what's a storehold

530
00:29:56,880 --> 00:29:59,080
Speaker 5: of wealth? So you can have a skill and you

531
00:29:59,120 --> 00:30:02,640
Speaker 5: can understand what's going on, and you can understand how

532
00:30:02,680 --> 00:30:06,320
Speaker 5: to position yourself, and you can maybe bring it to

533
00:30:06,440 --> 00:30:10,280
Speaker 5: Washington and or other places you can. You can bring

534
00:30:10,320 --> 00:30:14,160
Speaker 5: it to Washington. But it's the mechanics. The podcast, it

535
00:30:15,480 --> 00:30:20,000
Speaker 5: is not an ideology, Okay, to separate yourself from There

536
00:30:20,040 --> 00:30:23,760
Speaker 5: are different views and different preferences. And there's the left

537
00:30:23,760 --> 00:30:25,640
Speaker 5: and the right. And I can't tell you whether the

538
00:30:25,720 --> 00:30:28,520
Speaker 5: left or the right, that's a different question. But whether

539
00:30:28,560 --> 00:30:31,160
Speaker 5: you're of the left or you're of the right, they're

540
00:30:31,200 --> 00:30:34,960
Speaker 5: dealing with the same mechanics, and if you understand those mechanics,

541
00:30:35,320 --> 00:30:37,719
Speaker 5: then you as a policy maker can do it. And

542
00:30:37,760 --> 00:30:41,480
Speaker 5: now we're in a situation. Of course that policy politics

543
00:30:41,880 --> 00:30:44,800
Speaker 5: is part of that mechanics. Okay, now we have to

544
00:30:44,880 --> 00:30:47,560
Speaker 5: accept the politics, and then we have to say where

545
00:30:47,560 --> 00:30:50,000
Speaker 5: are we going and how do we best deal with that?

546
00:30:50,280 --> 00:30:51,400
Speaker 5: You can do all of that.

547
00:30:51,880 --> 00:30:54,000
Speaker 2: You know, Sometimes our truths that we don't want to

548
00:30:54,080 --> 00:30:55,800
Speaker 2: exist and maybe we try to turn our face or

549
00:30:55,840 --> 00:30:56,720
Speaker 2: we imagine the truth.

550
00:30:56,720 --> 00:30:59,480
Speaker 5: And they think that's bad. Well yeah, right, and so

551
00:30:59,520 --> 00:31:02,840
Speaker 5: I don't want no, No, it's just reality. You know.

552
00:31:02,920 --> 00:31:07,600
Speaker 2: There's one of the phrases that the CCP has over

553
00:31:07,640 --> 00:31:10,959
Speaker 2: in China seeking truth from facts, And it sounds very obvious,

554
00:31:11,000 --> 00:31:12,680
Speaker 2: but it is very hard to do it. It can

555
00:31:12,760 --> 00:31:16,320
Speaker 2: be hard to just look at facts and actually observe

556
00:31:16,400 --> 00:31:18,480
Speaker 2: the world as it is rather than.

557
00:31:18,480 --> 00:31:24,040
Speaker 5: As I think part of it is a habit. I mean,

558
00:31:25,880 --> 00:31:30,920
Speaker 5: I think that if we're if we're taught the emotional

559
00:31:31,200 --> 00:31:40,080
Speaker 5: like what is real? Reality is interesting, Reality is beautiful

560
00:31:40,120 --> 00:31:43,720
Speaker 5: in a sense. If you take evolution and things die

561
00:31:44,360 --> 00:31:46,960
Speaker 5: and and and things happen, they may not. It's like

562
00:31:47,560 --> 00:31:51,800
Speaker 5: if you recognize that and you think that way and

563
00:31:51,840 --> 00:31:55,360
Speaker 5: it's all part of that evolution and you and you

564
00:31:55,400 --> 00:31:58,640
Speaker 5: can get that in your mindset. That's so much better

565
00:31:59,120 --> 00:32:04,000
Speaker 5: than being a than saying I don't know, dying is bad.

566
00:32:05,280 --> 00:32:07,400
Speaker 5: I mean to give that as an example, or this

567
00:32:07,440 --> 00:32:10,920
Speaker 5: thing is bad, and when we approach it that this

568
00:32:11,000 --> 00:32:15,440
Speaker 5: thing is bad and so on, then it's that fault

569
00:32:15,680 --> 00:32:20,320
Speaker 5: of that thing, rather than Okay, how does the system work?

570
00:32:20,760 --> 00:32:23,400
Speaker 5: And then how do I then deal with the system

571
00:32:23,680 --> 00:32:26,560
Speaker 5: to get the best outcome? Because we could deal with

572
00:32:26,600 --> 00:32:30,520
Speaker 5: the system, For example, the mechanics today has a lot

573
00:32:30,560 --> 00:32:33,880
Speaker 5: to do with how people deal with each other. Right.

574
00:32:34,000 --> 00:32:37,840
Speaker 5: In other words, if we were collectively being able to

575
00:32:37,960 --> 00:32:43,120
Speaker 5: solve these problems and put the collective well being ahead,

576
00:32:43,480 --> 00:32:45,520
Speaker 5: we would have a lot less wars, we'd have a

577
00:32:45,560 --> 00:32:50,440
Speaker 5: lot better solving of problems, not the ideological and I

578
00:32:50,560 --> 00:32:52,760
Speaker 5: have to fight for that kind of thing. So it's

579
00:32:52,800 --> 00:32:55,720
Speaker 5: an approach. That approach could be taken on and taught.

580
00:32:57,200 --> 00:32:59,520
Speaker 3: This is the idea that you can't control the world,

581
00:32:59,560 --> 00:33:01,840
Speaker 3: but you can control your reactions.

582
00:33:01,880 --> 00:33:05,720
Speaker 5: You can influence the world. People together, world leaders if

583
00:33:05,720 --> 00:33:08,400
Speaker 5: they were to try to say what is the common

584
00:33:08,520 --> 00:33:12,160
Speaker 5: good and how do we work it out mechanistically so

585
00:33:12,320 --> 00:33:14,880
Speaker 5: that Okay, somebody's going to give here and somebody is

586
00:33:14,920 --> 00:33:17,840
Speaker 5: going to give there, and then we but that'll produce

587
00:33:17,920 --> 00:33:21,520
Speaker 5: a better outcome than if we go to war. You know,

588
00:33:21,640 --> 00:33:25,400
Speaker 5: there's there are better approaches that leaders of countries. Yes,

589
00:33:25,480 --> 00:33:29,600
Speaker 5: there's leaders countries can do this, and also individuals can

590
00:33:29,640 --> 00:33:31,480
Speaker 5: do this in terms of what they're going to be

591
00:33:31,600 --> 00:33:32,160
Speaker 5: with others.

592
00:33:32,520 --> 00:33:36,160
Speaker 3: Have you ever considered going into politics or policy? Is

593
00:33:36,200 --> 00:33:37,000
Speaker 3: that something that not?

594
00:33:37,080 --> 00:33:42,240
Speaker 5: Since I smart enough, because you know what, I think

595
00:33:42,240 --> 00:33:46,000
Speaker 5: it's I have great admiration, great appreciation for the people

596
00:33:46,040 --> 00:33:50,360
Speaker 5: who take on that life that we have a challenge

597
00:33:50,440 --> 00:33:53,480
Speaker 5: in terms of even how the system works because there

598
00:33:53,480 --> 00:33:57,400
Speaker 5: are so many people right now who have opinions want

599
00:33:57,440 --> 00:34:01,239
Speaker 5: to fight for those opinions. They determine the votes, then

600
00:34:01,520 --> 00:34:05,480
Speaker 5: they create people who are acting out. It's not an

601
00:34:05,520 --> 00:34:09,160
Speaker 5: effective I do think it's very difficult to be successful.

602
00:34:09,200 --> 00:34:13,719
Speaker 2: I do think though, I am worried how often you

603
00:34:13,920 --> 00:34:17,680
Speaker 2: counterintelligent people, thoughtful people, et cetera. And when you ask

604
00:34:17,719 --> 00:34:22,200
Speaker 2: them if they ever consider elected office, immediately like it's

605
00:34:22,440 --> 00:34:25,560
Speaker 2: it's actually a little bit. It is disturbing how quickly

606
00:34:26,200 --> 00:34:30,360
Speaker 2: basically anyone saying would have that anyone who's saying of

607
00:34:30,440 --> 00:34:33,120
Speaker 2: course I would never go into elected office or never

608
00:34:33,160 --> 00:34:36,200
Speaker 2: pursue elected office because you look around the environment's miserable.

609
00:34:36,400 --> 00:34:38,319
Speaker 2: But then you think, well, what kind of filter does

610
00:34:38,360 --> 00:34:40,359
Speaker 2: that have on the actual leaders that we end up do.

611
00:34:40,400 --> 00:34:46,120
Speaker 6: Get it is a reality, no, I know. But when

612
00:34:46,160 --> 00:34:48,560
Speaker 6: you think about that filter and you think about, okay,

613
00:34:48,600 --> 00:34:51,279
Speaker 6: you want quality leadership, et cetera, Well, look think about

614
00:34:51,280 --> 00:34:54,080
Speaker 6: anyone who seems like normally saying immediately says, of course

615
00:34:54,120 --> 00:34:55,640
Speaker 6: I would never go into elected.

616
00:34:55,560 --> 00:34:57,320
Speaker 5: Right, So let's just look at that for a minute

617
00:34:57,360 --> 00:35:01,080
Speaker 5: and take it through the perspective that I'm u trying

618
00:35:01,120 --> 00:35:04,320
Speaker 5: to convey. We look at that and how it's different

619
00:35:04,440 --> 00:35:08,359
Speaker 5: from ten or twenty years ago, and how the people are.

620
00:35:09,040 --> 00:35:12,080
Speaker 5: So the first thing we should do is besides saying

621
00:35:12,200 --> 00:35:17,360
Speaker 5: that's terrible, we should look at why is that? Okay?

622
00:35:17,840 --> 00:35:21,319
Speaker 5: Does that make sense? Yes? Why we can answer that

623
00:35:21,880 --> 00:35:26,120
Speaker 5: it makes sense. There's the clash that the party alignment

624
00:35:26,400 --> 00:35:32,120
Speaker 5: be analytical okay, and then say, okay, what do we do? Okay?

625
00:35:32,800 --> 00:35:36,560
Speaker 5: So maybe you're contributing it to good things in your way,

626
00:35:36,719 --> 00:35:39,839
Speaker 5: and you know, but you have to be practical. If

627
00:35:39,840 --> 00:35:42,600
Speaker 5: you're going to have an effect, you have to have

628
00:35:42,640 --> 00:35:45,839
Speaker 5: an effect on the people who have their hands on

629
00:35:45,880 --> 00:35:50,000
Speaker 5: the levers of power. They affect things, not us chatting

630
00:35:50,040 --> 00:35:53,879
Speaker 5: away here, okay, and the voters maybe, But what can

631
00:35:53,920 --> 00:35:56,480
Speaker 5: you do to help to bring about it? Or what

632
00:35:56,480 --> 00:35:59,560
Speaker 5: do you need to do yourself in order to do that?

633
00:35:59,640 --> 00:36:05,040
Speaker 5: So you have to be analytical and mechanical about what

634
00:36:05,080 --> 00:36:08,600
Speaker 5: the cause effect relationships, because it comes back to the

635
00:36:08,640 --> 00:36:13,680
Speaker 5: mechanics cause effect relationship. If you understand the cause effect relationships,

636
00:36:13,760 --> 00:36:17,440
Speaker 5: like how politics works, how the populations work, you can

637
00:36:17,440 --> 00:36:21,480
Speaker 5: be analytical in doing that. But also the cause you

638
00:36:21,520 --> 00:36:24,960
Speaker 5: can get ahead of the game because the causes happened

639
00:36:25,000 --> 00:36:28,760
Speaker 5: before the effects. And if you know the cause effect

640
00:36:28,800 --> 00:36:33,120
Speaker 5: relationship and you could see the causes and imagine the effects,

641
00:36:33,239 --> 00:36:34,319
Speaker 5: you can be ahead of the game.

642
00:36:50,480 --> 00:36:54,839
Speaker 3: Is there anything in your very long career experience that

643
00:36:55,000 --> 00:36:58,600
Speaker 3: didn't match up with previous examples or cycles in history?

644
00:36:58,760 --> 00:37:04,719
Speaker 5: All the time? I mean, I mean object nineteen seventy one.

645
00:37:05,040 --> 00:37:07,440
Speaker 5: In other words, I had a preconception. I walk on

646
00:37:07,440 --> 00:37:11,120
Speaker 5: the floor of the stock exchange and I realized, wow, Okay,

647
00:37:11,239 --> 00:37:13,719
Speaker 5: now I go to the thirties and I learned something.

648
00:37:14,560 --> 00:37:16,720
Speaker 4: About a bridgewater. An interesting time.

649
00:37:17,840 --> 00:37:21,640
Speaker 5: I can get. But what I've learned is that whatever

650
00:37:21,719 --> 00:37:26,560
Speaker 5: success in life I've had is also more because I

651
00:37:26,640 --> 00:37:29,560
Speaker 5: know how to deal with what I don't know than

652
00:37:29,640 --> 00:37:33,799
Speaker 5: anything I know. Okay, I learned that. Okay, I know

653
00:37:33,960 --> 00:37:37,680
Speaker 5: some things, but what I don't know about what the

654
00:37:37,719 --> 00:37:40,480
Speaker 5: future is, and so it's still very large. So I

655
00:37:40,560 --> 00:37:46,000
Speaker 5: learned how to diversify. I learned how through financial engineering,

656
00:37:46,400 --> 00:37:50,360
Speaker 5: in terms of controlling I could, through diversification, improve my

657
00:37:50,560 --> 00:37:55,759
Speaker 5: return to risk ratio by a factor of five by

658
00:37:56,280 --> 00:38:00,399
Speaker 5: keeping the return the same and diversifying well, that will

659
00:38:00,440 --> 00:38:05,480
Speaker 5: reduce the risk without reducing the returns. That's mechanics that

660
00:38:05,520 --> 00:38:08,560
Speaker 5: came from my knowing that I don't know that I

661
00:38:08,600 --> 00:38:12,440
Speaker 5: can't be sure. Okay, So when you're analytical that way

662
00:38:12,600 --> 00:38:15,839
Speaker 5: and you view these things as a puzzle, then there

663
00:38:15,840 --> 00:38:18,320
Speaker 5: are all these puzzles and you have to solve the puzzles.

664
00:38:18,520 --> 00:38:21,319
Speaker 5: But if you can do it calmly and analytically and

665
00:38:21,360 --> 00:38:24,239
Speaker 5: so on, you can engineer the mechanics or how you're

666
00:38:24,280 --> 00:38:26,520
Speaker 5: dealing with it. That's what I mean by principles for

667
00:38:26,600 --> 00:38:28,880
Speaker 5: dealing with reality and.

668
00:38:28,760 --> 00:38:32,680
Speaker 3: What about it? Bridgewater was there ever, and like, oh yes.

669
00:38:32,960 --> 00:38:38,680
Speaker 5: Allthing all the time. You know, I knew what I wanted. Okay,

670
00:38:38,880 --> 00:38:41,480
Speaker 5: that was that's an advantage if you start a company,

671
00:38:41,600 --> 00:38:43,440
Speaker 5: you can make it what you want, what the culture

672
00:38:43,440 --> 00:38:47,040
Speaker 5: should be, and you know in one sentence, I wanted

673
00:38:47,480 --> 00:38:53,880
Speaker 5: meaningful work and meaningful relationships through radical truthfulness and radical transparency. Okay,

674
00:38:54,320 --> 00:38:58,759
Speaker 5: So I really believe that if you can have meaningful work,

675
00:38:58,800 --> 00:39:01,520
Speaker 5: in other words, something you're in to the mission and

676
00:39:01,560 --> 00:39:05,840
Speaker 5: you have great relationships with people or in that mission,

677
00:39:06,000 --> 00:39:09,160
Speaker 5: maybe it's you two with odd lots Okay, I don't

678
00:39:09,200 --> 00:39:11,160
Speaker 5: know what it is. But if you're on that mission

679
00:39:11,360 --> 00:39:14,759
Speaker 5: and you have a great relationship and so on, that's magical.

680
00:39:15,120 --> 00:39:19,400
Speaker 5: But you also need to have radical truthfulness. In other words,

681
00:39:19,520 --> 00:39:21,359
Speaker 5: if you don't think he's doing a good job and

682
00:39:21,400 --> 00:39:25,279
Speaker 5: he or vice versa or something, it's like a team.

683
00:39:25,320 --> 00:39:28,400
Speaker 5: You've got to put together a team. I'm not picking

684
00:39:28,440 --> 00:39:28,680
Speaker 5: on you.

685
00:39:30,760 --> 00:39:31,840
Speaker 3: We're pretty honestly.

686
00:39:33,760 --> 00:39:37,279
Speaker 5: Let me finish answer this question, okay, because I haven't

687
00:39:37,320 --> 00:39:40,960
Speaker 5: gotten to the challenges. Okay, I want that. I believe

688
00:39:41,080 --> 00:39:44,359
Speaker 5: in that truthfulness and so on. So then there are

689
00:39:44,400 --> 00:39:48,600
Speaker 5: trade offs. Not everybody likes that, okay, not everybody. You know,

690
00:39:48,800 --> 00:39:53,280
Speaker 5: there's an aversion to looking at mistakes. There's an aversion

691
00:39:53,360 --> 00:39:57,120
Speaker 5: to looking at weaknesses. How do you get over that?

692
00:39:57,360 --> 00:39:59,440
Speaker 5: I have to face these questions and deal with it.

693
00:39:59,560 --> 00:40:02,600
Speaker 5: That's what to my first book, Principles of Life and Work.

694
00:40:02,800 --> 00:40:06,040
Speaker 5: But in other words, when we recognize that knowing our

695
00:40:06,160 --> 00:40:09,600
Speaker 5: weakness is is a great thing, it's a great power.

696
00:40:10,120 --> 00:40:13,239
Speaker 5: So how do you objectively get to the notion of

697
00:40:13,280 --> 00:40:16,920
Speaker 5: knowing your strengths and weaknesses? And I created personality profile

698
00:40:16,960 --> 00:40:20,400
Speaker 5: tests for your listeners. Go to it's a free test.

699
00:40:20,920 --> 00:40:23,759
Speaker 5: Principles you you can go online and learn about your

700
00:40:23,880 --> 00:40:26,399
Speaker 5: nature and what your nature is and how you deal

701
00:40:26,440 --> 00:40:30,960
Speaker 5: with things. So there's the constant encountering reality what your

702
00:40:30,960 --> 00:40:34,600
Speaker 5: goals are and what your aspirations are. And so I

703
00:40:34,680 --> 00:40:37,719
Speaker 5: encounter that. I thought, that's your question, and I encounter that,

704
00:40:37,840 --> 00:40:40,960
Speaker 5: and then you realize you encounter obstacles, and then you

705
00:40:41,080 --> 00:40:43,759
Speaker 5: view those obstacles as puzzles as you that you have

706
00:40:43,840 --> 00:40:46,680
Speaker 5: to solve in order to get better, because you have choices,

707
00:40:47,000 --> 00:40:49,520
Speaker 5: and if you make better choices, you get better outcomes.

708
00:40:49,840 --> 00:40:53,480
Speaker 5: So that I'm giving that as an example. So recognizing

709
00:40:53,520 --> 00:40:55,960
Speaker 5: that it's not the best place for some people, and

710
00:40:56,000 --> 00:40:59,440
Speaker 5: that other people couldn't possibly work anywhere else because they

711
00:40:59,480 --> 00:41:02,359
Speaker 5: can't get them meaningful work and bringing relationship or the

712
00:41:02,400 --> 00:41:06,600
Speaker 5: truthfulness you know, the truthfulness the politics, politics that goes

713
00:41:06,640 --> 00:41:09,319
Speaker 5: on in companies and so on. These people, a lot

714
00:41:09,360 --> 00:41:11,719
Speaker 5: of them could can't work anywhere else because they can't

715
00:41:11,760 --> 00:41:16,600
Speaker 5: get that truthfulness and that spirit. So yes, it's constantly

716
00:41:16,640 --> 00:41:20,600
Speaker 5: finding these things out through discovering of interacting with reality

717
00:41:20,840 --> 00:41:23,200
Speaker 5: and then solving puzzles and developing principles.

718
00:41:23,239 --> 00:41:24,960
Speaker 2: It occurs to me when you're talking about this, like

719
00:41:25,520 --> 00:41:28,359
Speaker 2: it's become very popular, maybe in the last ten years,

720
00:41:28,400 --> 00:41:30,440
Speaker 2: but probably a little bit longer. People love to talk

721
00:41:30,440 --> 00:41:32,880
Speaker 2: about corporate culture. This place is a good corporate culture,

722
00:41:32,960 --> 00:41:35,040
Speaker 2: this place is a bad corporate culture. What is the

723
00:41:35,040 --> 00:41:37,480
Speaker 2: corporate culture of Silicon Valley? What is the corporate culture

724
00:41:37,600 --> 00:41:40,719
Speaker 2: of the big banks, et cetera. I mean, you clearly

725
00:41:41,120 --> 00:41:44,000
Speaker 2: were One thing you're clearly very ahead of the curve

726
00:41:44,200 --> 00:41:46,840
Speaker 2: is just thinking about this term corporate culture.

727
00:41:47,760 --> 00:41:50,400
Speaker 5: You know, there's a term, and it's just like what

728
00:41:50,440 --> 00:41:51,640
Speaker 5: do you want to do? How do you want to

729
00:41:51,680 --> 00:41:54,160
Speaker 5: behave with each other? I mean, we don't have to

730
00:41:54,160 --> 00:41:57,480
Speaker 5: even use the word corporate culture in any relationship. If

731
00:41:57,520 --> 00:42:00,160
Speaker 5: you have a marriage, if you have friendships, if you

732
00:42:00,160 --> 00:42:03,319
Speaker 5: have partnerships, it's you have to face the question of

733
00:42:03,360 --> 00:42:04,799
Speaker 5: how you'd want to be with each other.

734
00:42:05,800 --> 00:42:08,759
Speaker 3: Yeah, well, how do you actually shape the culture? Then?

735
00:42:09,480 --> 00:42:15,440
Speaker 5: Well, two ways. I know what I believe is best whatever,

736
00:42:15,680 --> 00:42:18,839
Speaker 5: but I'm not actually sure. And then I go through

737
00:42:18,840 --> 00:42:21,239
Speaker 5: the question and answer. I believe I should have an

738
00:42:21,239 --> 00:42:25,319
Speaker 5: idea meritocracy that's a different from values. Different people can

739
00:42:25,400 --> 00:42:28,640
Speaker 5: live their lifestyles, different kinds of lifestyles, freedom of choice

740
00:42:28,640 --> 00:42:30,920
Speaker 5: to operate that way. But I kind of know what

741
00:42:30,960 --> 00:42:34,440
Speaker 5: I believe is best and what I want, and then

742
00:42:34,480 --> 00:42:39,440
Speaker 5: I have openness to debate is that right? Is that

743
00:42:39,520 --> 00:42:42,399
Speaker 5: the best? Because if you have an idea of meritocracy

744
00:42:42,440 --> 00:42:45,560
Speaker 5: where you can have anybody debate anything, you know, anybody

745
00:42:45,600 --> 00:42:49,600
Speaker 5: at Bridgewater at any time could could challenge me on anything.

746
00:42:49,680 --> 00:42:52,799
Speaker 5: And I felt the obligation for everybody to hear that

747
00:42:52,880 --> 00:42:55,719
Speaker 5: exchange of why I think this is best and not

748
00:42:56,000 --> 00:42:59,319
Speaker 5: and then let people make decisions or enlighten me when

749
00:42:59,360 --> 00:43:01,920
Speaker 5: it comes to that trade off, because otherwise they wouldn't

750
00:43:01,960 --> 00:43:03,279
Speaker 5: be invested in it, you know.

751
00:43:03,520 --> 00:43:05,799
Speaker 2: To take it on a practical level, how do you

752
00:43:05,800 --> 00:43:08,800
Speaker 2: deal with in an environment in which people are encouraged

753
00:43:08,840 --> 00:43:12,719
Speaker 2: to be transparent and to be critical even senior people

754
00:43:12,800 --> 00:43:15,840
Speaker 2: or junior people. How do you avoid the pitfall.

755
00:43:15,480 --> 00:43:16,560
Speaker 4: Of bullying in mobs?

756
00:43:16,640 --> 00:43:18,360
Speaker 2: Because I think this is actually very relevant when you

757
00:43:18,400 --> 00:43:20,600
Speaker 2: think about politics, we think about social media, et cetera.

758
00:43:20,840 --> 00:43:24,400
Speaker 2: How do you prevent an environment of openness from turning

759
00:43:24,400 --> 00:43:25,480
Speaker 2: into mob psychology?

760
00:43:25,520 --> 00:43:29,120
Speaker 5: None of them is perfect. Yeah, okay, okay, But first

761
00:43:29,120 --> 00:43:32,920
Speaker 5: of all, first you go and you paint the picture

762
00:43:33,000 --> 00:43:35,759
Speaker 5: of how it should be, okay, And you know that

763
00:43:35,960 --> 00:43:43,719
Speaker 5: not anyone's view is objective, okay, is your point of

764
00:43:43,800 --> 00:43:46,200
Speaker 5: view and your point of view may be different, and

765
00:43:46,360 --> 00:43:50,000
Speaker 5: highlight that. So if you go to ted Talks, there's

766
00:43:50,040 --> 00:43:52,560
Speaker 5: a Ted talk I gave, and it shows how we

767
00:43:53,360 --> 00:43:57,239
Speaker 5: I created a tool called a dot collector, which everybody

768
00:43:57,280 --> 00:44:00,239
Speaker 5: has put as we're having meetings, putting their thoughts in

769
00:44:00,320 --> 00:44:04,360
Speaker 5: and so on and their reactions so we feel free

770
00:44:04,440 --> 00:44:08,520
Speaker 5: to give your thoughts bring it up, including critical thoughts

771
00:44:08,520 --> 00:44:12,320
Speaker 5: and not. Then you get to what I call believability

772
00:44:12,360 --> 00:44:16,360
Speaker 5: decision waited decision making. How do you get about whether

773
00:44:16,400 --> 00:44:19,240
Speaker 5: this person is a better decision maker? What the strengths

774
00:44:19,280 --> 00:44:22,600
Speaker 5: and weaknesses of a person, of each person is so

775
00:44:22,640 --> 00:44:25,440
Speaker 5: that they can play their role well, if you if

776
00:44:25,440 --> 00:44:28,320
Speaker 5: you set that out as your aspiration. You'll find ways

777
00:44:28,360 --> 00:44:31,080
Speaker 5: of doing that. Like there may be tests, there may

778
00:44:31,120 --> 00:44:33,799
Speaker 5: be you know, how do you pick your doctor. You

779
00:44:33,840 --> 00:44:34,479
Speaker 5: know you have.

780
00:44:35,040 --> 00:44:38,120
Speaker 2: One who has an appointment open, Yeah, that's pretty much it.

781
00:44:39,920 --> 00:44:42,919
Speaker 5: You know what to get three smart people, the three

782
00:44:43,000 --> 00:44:46,160
Speaker 5: best or the two best, get a second opinion, and

783
00:44:46,200 --> 00:44:48,120
Speaker 5: you want to make sure. So it's the same thing

784
00:44:48,160 --> 00:44:50,480
Speaker 5: in picking people there and how do you do that?

785
00:44:50,719 --> 00:44:53,040
Speaker 5: You want that and then you have to let people

786
00:44:53,120 --> 00:44:55,759
Speaker 5: know that that's good for them and it's good for

787
00:44:55,800 --> 00:45:00,000
Speaker 5: the organization, that it's fair. Okay, that the process is fair.

788
00:45:00,320 --> 00:45:03,600
Speaker 5: It's not one person making a pronouncement of what another

789
00:45:03,640 --> 00:45:06,799
Speaker 5: person is like that. You go through the cases and

790
00:45:06,840 --> 00:45:09,000
Speaker 5: you say, oh, that case happened that way, and it

791
00:45:09,080 --> 00:45:11,400
Speaker 5: happened again. What do you think and so on? You

792
00:45:11,480 --> 00:45:13,719
Speaker 5: work your way. Once you have the notion that the

793
00:45:13,800 --> 00:45:16,239
Speaker 5: system is fair and you're just trying to get at

794
00:45:16,320 --> 00:45:19,640
Speaker 5: what's true and what are people's strengths and weaknesses and

795
00:45:19,680 --> 00:45:22,880
Speaker 5: so on, you're making great leaps toward that. As this

796
00:45:22,960 --> 00:45:26,240
Speaker 5: thing from most companies in which they don't talk about

797
00:45:26,239 --> 00:45:29,400
Speaker 5: that and you know, or they're behind the scenes, Like

798
00:45:29,440 --> 00:45:32,600
Speaker 5: I had a rule if you talk behind somebody's back

799
00:45:32,640 --> 00:45:39,279
Speaker 5: three times or more critically, you're out, okay if but

800
00:45:39,440 --> 00:45:42,239
Speaker 5: you're always free to bring it up and deal with it,

801
00:45:42,320 --> 00:45:45,680
Speaker 5: because let's deal with it. Let's try to find out

802
00:45:45,719 --> 00:45:48,320
Speaker 5: what the problem is and deal with it that way.

803
00:45:48,520 --> 00:45:51,680
Speaker 5: So on the bullying, they can tell the bully, Okay,

804
00:45:51,880 --> 00:45:54,200
Speaker 5: you can tell the book why why did you do that?

805
00:45:54,280 --> 00:45:57,719
Speaker 5: Why is that that way? But in any case, that

806
00:45:57,960 --> 00:46:01,200
Speaker 5: was my path, whether you choose it different path, I

807
00:46:01,200 --> 00:46:05,040
Speaker 5: think you have to agree that getting a truthfulness teams

808
00:46:05,080 --> 00:46:08,400
Speaker 5: sports teams have to do this right, So how do

809
00:46:08,480 --> 00:46:10,960
Speaker 5: you select I'm sorry, you're not doing a good job

810
00:46:11,000 --> 00:46:13,719
Speaker 5: at that thing. You have to deal with it and

811
00:46:13,760 --> 00:46:15,680
Speaker 5: you have to make the team great. It's like that.

812
00:46:16,000 --> 00:46:17,920
Speaker 3: Well, so now I have to ask what do you

813
00:46:17,920 --> 00:46:21,960
Speaker 3: think about multi strats and the pod shops because the

814
00:46:22,000 --> 00:46:24,960
Speaker 3: culture that you're laying out where everyone is sort of

815
00:46:25,000 --> 00:46:27,640
Speaker 3: talking to each other and challenging each other, seems very

816
00:46:27,760 --> 00:46:31,080
Speaker 3: very different to the multi strat model that seems to

817
00:46:31,120 --> 00:46:34,680
Speaker 3: be much more predicated on, you know, little teams that

818
00:46:34,719 --> 00:46:36,560
Speaker 3: are sort of often doing their own thing.

819
00:46:36,719 --> 00:46:39,240
Speaker 5: There's different ways to play the game. That's a totally

820
00:46:39,320 --> 00:46:43,120
Speaker 5: valid way to play the game, and maybe related maybe

821
00:46:43,160 --> 00:46:47,160
Speaker 5: it's just a totally utilitarian way. In that way, is

822
00:46:47,200 --> 00:46:50,600
Speaker 5: it effective in making the investment decision? Can be very

823
00:46:50,600 --> 00:46:54,560
Speaker 5: effective for lots of reasons. I can digress into uncorrelated

824
00:46:54,600 --> 00:46:58,000
Speaker 5: return streams, many operations blah blah blah blah blah that

825
00:46:58,040 --> 00:47:01,920
Speaker 5: could be very effective may not be effective of creating

826
00:47:02,719 --> 00:47:06,120
Speaker 5: the meaningful relationships and those types of things. Therefore, you're

827
00:47:06,120 --> 00:47:09,839
Speaker 5: going to have a continuity and a competitiveness problem. In

828
00:47:09,840 --> 00:47:11,080
Speaker 5: other words, people will go.

829
00:47:11,040 --> 00:47:13,799
Speaker 3: For, you know, which is what we've seen a little bit.

830
00:47:13,800 --> 00:47:17,040
Speaker 5: More, a little bit more money, a little bit more.

831
00:47:17,120 --> 00:47:19,399
Speaker 5: They're not in it together. They're not cheering their lives,

832
00:47:19,440 --> 00:47:22,480
Speaker 5: they're not cheering their mission together, and so on. So

833
00:47:22,680 --> 00:47:26,040
Speaker 5: maybe it's a fun, totally fine way for the investment management,

834
00:47:26,040 --> 00:47:28,520
Speaker 5: but it's not a fine way for building a fifty

835
00:47:28,680 --> 00:47:31,399
Speaker 5: year old I did this, I built a fifty year

836
00:47:31,440 --> 00:47:34,200
Speaker 5: old organization, while others.

837
00:47:34,200 --> 00:47:37,040
Speaker 2: It has raised a question like in those environments, like

838
00:47:37,080 --> 00:47:39,719
Speaker 2: what is the franchise value? Because what happened? Right, what

839
00:47:39,880 --> 00:47:43,840
Speaker 2: seems to be this model which has produced extraordinary returns

840
00:47:44,080 --> 00:47:46,719
Speaker 2: for some investors. You do get the situation in which

841
00:47:46,719 --> 00:47:49,680
Speaker 2: everyone is sort of a mercenary. I've never and then

842
00:47:50,360 --> 00:47:52,600
Speaker 2: and everyone you know, you dangle these big paychecks and

843
00:47:52,600 --> 00:47:53,920
Speaker 2: bonuses and you're.

844
00:47:53,800 --> 00:47:55,720
Speaker 3: An independent contract basically.

845
00:47:55,920 --> 00:47:58,080
Speaker 2: Yeah, it's hard to imagine that environment building a fifty

846
00:47:58,120 --> 00:47:58,720
Speaker 2: year franchise.

847
00:47:58,880 --> 00:48:01,080
Speaker 5: I think I think it's I think it's not going

848
00:48:01,120 --> 00:48:03,640
Speaker 5: to last, and it's particularly in the area of an

849
00:48:03,640 --> 00:48:10,880
Speaker 5: aire sire. I think that you're going to have and

850
00:48:10,960 --> 00:48:15,360
Speaker 5: I'm going to try to help it. AI enabled ability

851
00:48:15,440 --> 00:48:21,239
Speaker 5: to be an independent investment manager okay, like Uber. Okay,

852
00:48:21,640 --> 00:48:25,239
Speaker 5: Uber's got a technology that they take the individual, they

853
00:48:25,280 --> 00:48:29,400
Speaker 5: plug them into that that technology and whatever, and everybody

854
00:48:29,440 --> 00:48:31,400
Speaker 5: can do that. In a sense, I think we're going

855
00:48:31,440 --> 00:48:34,600
Speaker 5: to be moving more into that direction. So what is

856
00:48:34,640 --> 00:48:37,520
Speaker 5: it that's a path that we can go down and

857
00:48:38,120 --> 00:48:39,200
Speaker 5: that's a whole other path.

858
00:48:39,360 --> 00:48:41,000
Speaker 3: Well, you said you're going to try to help it.

859
00:48:41,160 --> 00:48:42,840
Speaker 3: What does that mean. Are you working on something?

860
00:48:43,120 --> 00:48:46,520
Speaker 5: Well, I might. I'm building my own ability and I

861
00:48:46,560 --> 00:48:50,400
Speaker 5: want to share how people can do certain things. That's it.

862
00:48:50,880 --> 00:48:53,400
Speaker 4: But you don't think this model this because it's been

863
00:48:53,480 --> 00:48:53,879
Speaker 4: very hot.

864
00:48:53,920 --> 00:48:56,799
Speaker 2: Again, talk about things that have changed ten years. Ten

865
00:48:56,880 --> 00:48:58,920
Speaker 2: years ago, we were not talking about multi strategy, talk

866
00:48:58,960 --> 00:49:01,319
Speaker 2: about fund to fund. Yeah, fund of finds much more

867
00:49:01,520 --> 00:49:04,440
Speaker 2: back then. You're it sounds that you're skeptical that this

868
00:49:04,520 --> 00:49:06,480
Speaker 2: model will endure much will endure?

869
00:49:06,600 --> 00:49:09,839
Speaker 5: Well, I think in everybody. I'm just looking at mechanisms. Yah, yeah, yeah,

870
00:49:09,840 --> 00:49:14,800
Speaker 5: talk about okay, So what creates cohesiveness? You have to

871
00:49:14,880 --> 00:49:19,200
Speaker 5: have the need for cohesiveness. Okay, what is the cohesiveness?

872
00:49:19,280 --> 00:49:22,879
Speaker 5: What is the commitment? Okay? I think when we help

873
00:49:22,920 --> 00:49:28,120
Speaker 5: each other. I believe in how people can help each other. Okay,

874
00:49:28,280 --> 00:49:31,080
Speaker 5: are they helping each other? Can they be better? And

875
00:49:31,120 --> 00:49:35,560
Speaker 5: that's the question, isn't it? Okay? So when we're thinking multistrap,

876
00:49:35,719 --> 00:49:38,279
Speaker 5: if everybody's there and you put it together, that that

877
00:49:38,320 --> 00:49:43,080
Speaker 5: could be done technologically very easily. Right, So is that

878
00:49:43,160 --> 00:49:47,880
Speaker 5: going to stick it together? Okay? What is a relationship like? Okay,

879
00:49:47,920 --> 00:49:51,280
Speaker 5: to be on the mission together and to have relationships

880
00:49:51,440 --> 00:49:54,480
Speaker 5: and so on is invaluable not only in terms of

881
00:49:54,520 --> 00:49:58,120
Speaker 5: effectiveness in terms of doing job because different people have

882
00:49:58,200 --> 00:50:01,160
Speaker 5: different skills and you do that together, but it is

883
00:50:01,200 --> 00:50:06,320
Speaker 5: also psychologically rewarding. The greatest source of happiness Okay, this

884
00:50:06,440 --> 00:50:10,920
Speaker 5: is I think an important thing. Studies of happiness all

885
00:50:10,960 --> 00:50:14,280
Speaker 5: around the world and so on shows that income past

886
00:50:14,280 --> 00:50:17,160
Speaker 5: a certain level does not bring a higher level of happiness.

887
00:50:17,320 --> 00:50:19,759
Speaker 5: Once you get the basics taken care of that. The

888
00:50:19,800 --> 00:50:24,160
Speaker 5: greatest source of happiness is community. Yeah, do I have

889
00:50:24,200 --> 00:50:27,440
Speaker 5: a sense of community? Okay? People who are there for

890
00:50:27,520 --> 00:50:29,680
Speaker 5: me and I can help and I work for that.

891
00:50:29,680 --> 00:50:34,279
Speaker 5: That's a powerful force and it's very rewarding. Okay, those

892
00:50:34,320 --> 00:50:35,080
Speaker 5: are my thoughts.

893
00:50:36,680 --> 00:50:40,200
Speaker 3: I have one more question, since we're being very retrospective

894
00:50:40,360 --> 00:50:44,080
Speaker 3: here and nostalgic in some ways, do you think if

895
00:50:44,120 --> 00:50:46,879
Speaker 3: you were setting out today, do you think you would

896
00:50:46,920 --> 00:50:49,800
Speaker 3: have been able to create a bridgewater in the current environment?

897
00:50:50,480 --> 00:50:54,600
Speaker 5: Yep, how would you say? I think, I think, and

898
00:50:54,680 --> 00:51:01,840
Speaker 5: I think that everybody can. And that on entrepreneurship is

899
00:51:02,400 --> 00:51:07,680
Speaker 5: so clearly an example that it is the greatest power.

900
00:51:08,160 --> 00:51:12,640
Speaker 5: Money is not the greatest power. Money will seek out

901
00:51:12,760 --> 00:51:16,920
Speaker 5: the people, the entrepreneur, the person who has the talent

902
00:51:17,400 --> 00:51:20,879
Speaker 5: have enabled people, and then money will go to them

903
00:51:21,000 --> 00:51:24,000
Speaker 5: to make them. That's what investors do. We try to

904
00:51:24,000 --> 00:51:26,560
Speaker 5: find those people are going to make these new things.

905
00:51:26,680 --> 00:51:30,160
Speaker 5: Wonderful things happen. So the talent of an individual to

906
00:51:30,280 --> 00:51:35,520
Speaker 5: attract money, to attract the resources that are necessary for success. Okay,

907
00:51:36,040 --> 00:51:38,839
Speaker 5: we can do that. Now. The question is how are you?

908
00:51:39,120 --> 00:51:42,279
Speaker 5: Are you the next one of those who's got the

909
00:51:42,400 --> 00:51:46,200
Speaker 5: ideas and can put that together and make the case

910
00:51:46,280 --> 00:51:49,399
Speaker 5: for your supports that I need this and the other

911
00:51:49,480 --> 00:51:52,799
Speaker 5: thing and grow and become better. Yes, I believe that

912
00:51:52,880 --> 00:51:55,879
Speaker 5: we're in a period of time that that's very very good.

913
00:51:56,080 --> 00:51:58,920
Speaker 5: You need different resources than you did. You know. The

914
00:51:58,920 --> 00:52:01,080
Speaker 5: way I did it is I played. I was a kid.

915
00:52:01,280 --> 00:52:04,160
Speaker 5: I played the markets. I like the markets. Then on

916
00:52:04,160 --> 00:52:06,640
Speaker 5: one day I make a pitch to somebody. I did

917
00:52:06,640 --> 00:52:09,000
Speaker 5: my thing, and then the World Bank gave me a

918
00:52:09,040 --> 00:52:11,680
Speaker 5: five million dollar count. Okay, World Bank gives me a

919
00:52:11,719 --> 00:52:14,680
Speaker 5: five million dollar account because we were just talking about markets,

920
00:52:14,719 --> 00:52:16,680
Speaker 5: and they gave me a five million dollar count. And

921
00:52:16,680 --> 00:52:20,600
Speaker 5: that's started me in the institutional asset management business. Then

922
00:52:20,640 --> 00:52:23,400
Speaker 5: the next one gives me the account. Then I get

923
00:52:23,480 --> 00:52:25,840
Speaker 5: to build a track record. Then I get to build

924
00:52:25,840 --> 00:52:28,719
Speaker 5: the things I need. I mean right now, if you're

925
00:52:28,760 --> 00:52:32,640
Speaker 5: running an operation, it can be expensive because you need

926
00:52:32,680 --> 00:52:35,520
Speaker 5: compliance department, you have to deal with the regulatory things.

927
00:52:35,560 --> 00:52:37,680
Speaker 5: You have a lot of those things expense, but you

928
00:52:37,719 --> 00:52:38,880
Speaker 5: can find your way.

929
00:52:40,719 --> 00:52:44,439
Speaker 2: Ray Dalli on Underbridgewater, thank you so much for coming

930
00:52:44,440 --> 00:52:45,840
Speaker 2: on back on the podcast.

931
00:52:46,200 --> 00:52:48,680
Speaker 5: So good to be back in Congratulations again for your

932
00:52:48,680 --> 00:52:49,160
Speaker 5: ten years.

933
00:52:49,239 --> 00:52:52,080
Speaker 4: Keep it up, Thank you so much. Well looking forward

934
00:52:52,080 --> 00:52:53,120
Speaker 4: to our fifty aeth year.

935
00:52:53,239 --> 00:52:55,640
Speaker 2: That'll be see if we can pull that up there, Yeah,

936
00:52:55,640 --> 00:52:56,000
Speaker 2: we'll see.

937
00:52:56,000 --> 00:53:10,680
Speaker 4: That was fantastic. Thank you so much for Tracy. Fifty

938
00:53:10,760 --> 00:53:13,919
Speaker 4: years is insane. I mean, that's insane, like in any field.

939
00:53:13,920 --> 00:53:15,480
Speaker 3: Media, it actually is.

940
00:53:15,920 --> 00:53:17,600
Speaker 2: But when I like when I said that a lot

941
00:53:17,640 --> 00:53:20,560
Speaker 2: of and when he said he ran that almost seems

942
00:53:20,560 --> 00:53:22,399
Speaker 2: too hard to wrap my head around that you could

943
00:53:22,520 --> 00:53:26,160
Speaker 2: run something for fifty a hedge fund that it could survive,

944
00:53:27,120 --> 00:53:28,520
Speaker 2: Like that's an incredible track record.

945
00:53:28,760 --> 00:53:30,799
Speaker 3: Yeah, well he said he was seventy six years old,

946
00:53:30,960 --> 00:53:34,040
Speaker 3: so yeah, no, he must have started it very very young. Yeah,

947
00:53:34,680 --> 00:53:38,520
Speaker 3: twenty six. Yeah, I don't know, I've I'm kind of

948
00:53:38,520 --> 00:53:41,239
Speaker 3: in I'm in a strange mood now. I'm very like

949
00:53:41,560 --> 00:53:45,759
Speaker 3: introspective and retrospective and thinking about the future. But I

950
00:53:45,800 --> 00:53:49,040
Speaker 3: do think, you know, it is true he pioneered a

951
00:53:49,040 --> 00:53:52,400
Speaker 3: lot of stuff like culture, and we hear a lot

952
00:53:52,480 --> 00:53:56,600
Speaker 3: of stuff about Bridgewaters very special culture in some distinct culture.

953
00:53:56,719 --> 00:53:57,560
Speaker 3: Distinct culture.

954
00:53:57,840 --> 00:54:00,719
Speaker 2: Yeah, you know, I'll say a couple of things is that,

955
00:54:01,280 --> 00:54:05,080
Speaker 2: you know, I feel like as a as a middle

956
00:54:05,080 --> 00:54:06,520
Speaker 2: aged man, you know, you.

957
00:54:06,480 --> 00:54:09,280
Speaker 4: Start to like change your view on the world and you're.

958
00:54:09,120 --> 00:54:12,960
Speaker 2: Like, wait, does everything seem a little crazy objectively or

959
00:54:13,040 --> 00:54:14,760
Speaker 2: is it just my state in life and.

960
00:54:14,640 --> 00:54:16,360
Speaker 3: What I am I losing touch?

961
00:54:16,520 --> 00:54:18,759
Speaker 2: No, I think it's important, and I actually would like

962
00:54:18,840 --> 00:54:21,160
Speaker 2: the answer in some way to be that I'm losing touch,

963
00:54:21,239 --> 00:54:24,400
Speaker 2: Like everything's totally fine. I'm just sort of like aging,

964
00:54:24,719 --> 00:54:26,920
Speaker 2: sort of out of touch these days. And so I

965
00:54:26,920 --> 00:54:29,640
Speaker 2: don't know whether I find it like reassuring or not.

966
00:54:29,880 --> 00:54:32,279
Speaker 2: That No, Like, these are really big things that are

967
00:54:32,320 --> 00:54:35,160
Speaker 2: going on, and all of these things, these big historical forces,

968
00:54:35,200 --> 00:54:37,240
Speaker 2: we've got a bunch of them, all sort of converging

969
00:54:37,320 --> 00:54:37,640
Speaker 2: at once.

970
00:54:37,800 --> 00:54:40,280
Speaker 3: Well, they are big things going on. But I think

971
00:54:40,560 --> 00:54:43,800
Speaker 3: one comforting thing, and this is why I think people

972
00:54:43,840 --> 00:54:47,880
Speaker 3: tend to read history in times of change, because you

973
00:54:47,920 --> 00:54:50,680
Speaker 3: feel very unsettled, you feel very insecure, and so you

974
00:54:50,719 --> 00:54:53,920
Speaker 3: look back at history and just start seeing these patterns

975
00:54:54,040 --> 00:54:57,040
Speaker 3: to raise point and then you're like, oh, okay, maybe

976
00:54:57,040 --> 00:55:00,319
Speaker 3: things will be all right. But also you can read

977
00:55:00,360 --> 00:55:02,640
Speaker 3: certain history books and think, oh god, things are going

978
00:55:02,680 --> 00:55:03,320
Speaker 3: to be terrible.

979
00:55:03,440 --> 00:55:06,560
Speaker 2: Yeah, I know it's all about the books, and I

980
00:55:06,560 --> 00:55:08,440
Speaker 2: suppose it's about the time frame. I mean the other thing,

981
00:55:08,560 --> 00:55:12,520
Speaker 2: and Ray mentioned is in terms of legacy, I do

982
00:55:12,680 --> 00:55:20,719
Speaker 2: associate Bridgewater specifically with teaching lots of people about the

983
00:55:20,800 --> 00:55:23,719
Speaker 2: sort of specific ways that you can achieve great returns

984
00:55:23,800 --> 00:55:26,839
Speaker 2: through leverage plus diversity care right, which is sort of

985
00:55:26,880 --> 00:55:30,000
Speaker 2: like the magic that they brought to it, which is

986
00:55:30,360 --> 00:55:34,960
Speaker 2: we're going to diversify. And you typically associate diversification with

987
00:55:35,160 --> 00:55:36,560
Speaker 2: I'm going to sleep better at night, but I'm a

988
00:55:36,600 --> 00:55:37,799
Speaker 2: sacrifice return.

989
00:55:37,640 --> 00:55:38,320
Speaker 4: Right, And that's fine.

990
00:55:38,440 --> 00:55:40,120
Speaker 2: But the idea is like, well maybe you can like

991
00:55:40,200 --> 00:55:43,960
Speaker 2: sort of you know, achieve both through leverage, and of

992
00:55:44,000 --> 00:55:48,680
Speaker 2: course it worked really well and yeah, the results speak

993
00:55:48,719 --> 00:55:51,919
Speaker 2: for This is also interesting comments about Mac. I'm glad

994
00:55:51,920 --> 00:55:54,760
Speaker 2: you as multi, Yeah, multi, because that was very interesting.

995
00:55:54,800 --> 00:55:59,239
Speaker 3: Well, this idea that relationships are like personal camaraderie is

996
00:55:59,280 --> 00:56:01,720
Speaker 3: the glue that's sort of holds the whole thing together.

997
00:56:01,960 --> 00:56:04,520
Speaker 2: I think if you talk to people in that in

998
00:56:04,560 --> 00:56:08,440
Speaker 2: that world, like the money can be great obviously, but

999
00:56:08,600 --> 00:56:13,080
Speaker 2: I never ever sounds like a particularly satisfying life in

1000
00:56:13,200 --> 00:56:15,279
Speaker 2: terms of, you know, everyone is aware that they're on

1001
00:56:15,320 --> 00:56:17,279
Speaker 2: a short leash, et cetera. There's not really much of

1002
00:56:17,320 --> 00:56:21,160
Speaker 2: a team, et cetera. It seems very mercenary and so forth.

1003
00:56:21,120 --> 00:56:23,680
Speaker 4: Someone else are leaving all the time, all the time.

1004
00:56:23,760 --> 00:56:26,680
Speaker 2: Yeah, and so it is interesting to think, you know,

1005
00:56:26,719 --> 00:56:30,080
Speaker 2: there have been some implosions, not really blow ups per se,

1006
00:56:30,160 --> 00:56:33,680
Speaker 2: but implosions. It does sort you do sort of wonder

1007
00:56:33,800 --> 00:56:37,360
Speaker 2: whether the balance of power or whether the how sustainable

1008
00:56:37,680 --> 00:56:40,200
Speaker 2: this model is. It's been a while since we've done

1009
00:56:40,320 --> 00:56:43,440
Speaker 2: a multi stride episode, so I should revisit it because

1010
00:56:43,440 --> 00:56:44,719
Speaker 2: there have been some developments.

1011
00:56:44,880 --> 00:56:46,239
Speaker 3: Yeah, all right, shall we leave it there.

1012
00:56:46,320 --> 00:56:47,000
Speaker 4: Let's leave it there.

1013
00:56:47,080 --> 00:56:49,400
Speaker 3: This has been another episode of the All Thoughts podcast.

1014
00:56:49,520 --> 00:56:52,880
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.

1015
00:56:52,600 --> 00:56:55,360
Speaker 2: And I'm Joe Wisenthal. You can follow me at the Stalwart.

1016
00:56:55,600 --> 00:56:58,920
Speaker 2: Follow our producers Carmen Rodriguez at Carman armand Deesh Hall

1017
00:56:58,920 --> 00:57:02,200
Speaker 2: Been at a Dashbop Kilbrooks at Kilbrooks. From more Odd

1018
00:57:02,239 --> 00:57:04,919
Speaker 2: Lots content, go to Bloomberg dot com. Slash odd Lots

1019
00:57:04,960 --> 00:57:07,759
Speaker 2: were a daily newsletter and all of our episodes, and

1020
00:57:07,800 --> 00:57:09,759
Speaker 2: you can chat about all of these topics twenty four

1021
00:57:09,800 --> 00:57:13,680
Speaker 2: to seven in our discord Discord dot gg slash od Lots.

1022
00:57:13,440 --> 00:57:15,440
Speaker 3: And if you enjoy odd Lots, if you like it

1023
00:57:15,480 --> 00:57:18,880
Speaker 3: when we look back at Ray Dalio's five decade long career,

1024
00:57:18,920 --> 00:57:21,560
Speaker 3: then please leave us a positive review on your favorite

1025
00:57:21,560 --> 00:57:25,240
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1026
00:57:25,280 --> 00:57:28,400
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1027
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1028
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